Missing from the system: Metros and skills development

Policy Paper 61

Abstract

South Africa's skills system is widely recognised to be performing badly, including governance failures, operational inefficiencies and misalignment between the training funded and the needs of the evolving economy. This paper identifies an overlooked weakness: poor relationships between the supply and demand for skills at the local labour-market level, particularly within cities. The skills system is organised primarily on a sectoral rather than a spatial basis, despite big differences between local labour markets. Metropolitan economies account for two-thirds of formal employment, yet metro institutions have no formal role in skills planning, oversight or labour-market intelligence. We describe this as a spatial governance mismatch: the geography of skills decision-making does not correspond to the geography of most labour markets. The paper maps this mismatch across the constitutional and legislative architecture, examines how the metros articulate skills priorities without having any real authority, and proposes a new role in skills development. This would add labour-market intelligence, skills matching and local ecosystem development into existing planning and funding mechanisms, while retaining national qualification standards, quality assurance and SETA sector expertise.